Carbon pricing

Social Zero – an alternative to the Social Cost of Carbon

Social zero – An alternative to the social cost of carbon called the “near-term to net-zero” (NT2NZ) approach has been developed to estimate the CO2 prices needed in the near term for consistency with a net-zero emissions target, according to a study published in the journal Nature Climate Change. For a US 2050 net-zero target, a NT2NZ CO2 price would be $34-64 per tonne in 2025 and $77-124 per tonnes in 2030. These results are most influenced by assumptions about complementary policies and oil prices. To demonstrate how it works: first, you select the year in which you’re aiming to hit net-zero emissions. Next, you select the pathway you want emissions to follow between now and then. Perhaps you think you can make steady progress starting immediately, so you choose a linear downward slope. But if you think you’re going to need to invest in solutions that aren’t quite ready to take off yet, you might aim for initial slow progress followed by a rapid drop. Then, you simply plug this scenario into some economic models and solve for the carbon price that makes it happen. (Arstechnica)

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